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Day 13: What to Know About 1099-NEC & Contractors: A Simple Guide for Businesses and Freelancers

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๐Ÿงพ Day 13: What to Know About 1099-NEC & Contractors: A Simple Guide for Businesses and Freelancers In today’s flexible work landscape, hiring independent contractors can be a smart move—offering agility without the long-term commitments of traditional employment. But with this freedom comes responsibility, especially when it’s time to tackle tax forms like the 1099-NEC . Let’s break down what you need to know about using this form and working with contractors, without the tax jargon overload. ๐Ÿ“Œ What Is the 1099-NEC? The 1099-NEC (Nonemployee Compensation) is an IRS form used to report payments made to nonemployees for services. It replaced the old use of Form 1099-MISC for service payments starting in 2020 . You’ll need to issue this form if you paid: $600 or more in the calendar year To an individual or business not classified as an employee For services (not products or rent) Who is not incorporated—i.e., a sole proprietor or LLC taxed as such It goes to both t...
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Bookkeeping Categorization/ ํšŒ๊ณ„ ๋ถ„๋ฅ˜

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Mastering  Bookkeeping Categorization : The Foundation of Financial Clarity Whether you're running a startup, managing freelance income, or just trying to keep your side hustle organized, one of the most overlooked—but absolutely critical—parts of financial management is bookkeeping categorization . Properly categorizing your financial transactions is more than a clerical task—it's the key to informed decision-making, tax compliance, and business growth. What Is Bookkeeping Categorization? At its core, bookkeeping categorization involves labeling each transaction (income, expense, asset, liability, or equity) so it fits into a well-defined chart of accounts. These categories help paint a clear picture of your financial health, ensure accurate reporting, and simplify tax time. Example: Date Description Amount Category 2025-05-03 Shopify Sales $1,200 Income 2025-05-05 Google Ads $300 Advertising 2025-05-07 MacBook Purchase $2,000 Equipment Why Is It Important? 1. Tax Deduc...
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